Do the Rich Need the Rest of America?

(this from The Wall Street Journal -- food for thought. Please follow link to original)

By Robert Frank

Late last year, the U.S. economy experienced a surprising decoupling.

As stocks boomed, the wealthy bounced back. And while the Main Street economy was wracked by high unemployment and the real-estate crash, the wealthy–whose financial fates were more tied to capital markets than jobs and houses– picked themselves up, brushed themselves off and started buying luxury goods again.

Associated Press

Seeking their fortunes elsewhere?

Who knows what the next few months and years will bring. But one thing seems clear: the economic fate of Richistan seems increasingly separate from the fate of the U.S.

Some argue that the decoupling has gone even further. Michael Lind, a policy director for the Economic Growth Program at the New American Foundation, argues in Salon that the American rich no longer need the rest of America.

He says the wealthy increasingly earn their fortunes with overseas labor, selling to overseas consumers and managing financial transactions that have little to do with the rest of the U.S. “A member of the elite can make money from factories in China that sell to consumers in India, while relying entirely or almost entirely on immigrant servants at one of several homes around the country.”

He adds:

If the American rich increasingly do not depend for their wealth on American workers and American consumers or for their safety on American soldiers or police officers, then it is hardly surprising that so many of them should be so hostile to paying taxes to support the infrastructure and the social programs that help the majority of the American people. The rich don’t need the rest anymore.

Some would argue this is a vast overstatement. The U.S. remains the largest consumer market in the world and still matters to Bill Gates, Warren Buffett and Lloyd Blankfein alike. The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces.

Yet the increasingly global elite do seem to be forming something of their own financial culture, unattached to any single nation or set of rules, and increasingly free to move their money and resources (and tax dollars) wherever they are treated best.

Rather than having a second home in Richistan, an increasing number of rich people seem to be moving their money there full time.

Do you think the rest of America matters anymore to the rich?